Charges Under the Foreign Corrupt Practices Act Concerned Subsidiaries in Germany and Ukraine

Archer Daniels Midland Co.
ADM 0.43%
has agreed to pay more than $36 million to settle charges under the Foreign Corrupt Practices Act that it failed to prevent bribes by its subsidiaries in Germany and Ukraine, the Securities and Exchange Commission said Friday.

The SEC said the subsidiaries paid more than $21 million to bribe government officials through intermediaries in order to receive value-added tax refunds. The alleged bribery lasted from 2002 to 2008, and netted about $33 million in illegal profits according to the SEC.

In a parallel action, the Justice Department said the company's subsidiary in Ukraine pleaded guilty to settle bribery charges and agreed to pay more than $17 million. The company entered into a nonprosecution agreement with the department, as well.

"ADM's lackluster antibribery controls enabled its subsidiaries to get preferential refund treatment by paying off foreign government officials,"
Gerald Hodgkins,
an associate director in the SEC's Division of Enforcement, said in a statement.

Archer Daniels Midland Chairman and Chief Executive
Patricia Woertz
said the company became aware of "questionable transactions" in 2008, conducted an investigation, and then disclosed the matter to U.S. and foreign authorities in 2009.

"The conduct that led to this settlement was regrettable, but I believe we handled our response in the right way, and that the steps we took, including self-reporting, underscore our commitment to conducting business ethically and responsibly," Ms. Woertz said.

ADM indicated previously that a settlement over the allegations was in the works, saying in a federal filing in October that it was in talks with the Justice Department and the SEC to resolve the matter. The company also in August increased its reserves to $54 million for settling the allegations.

ADM in 2011 disclosed that it had begun an internal probe in 2008 focusing on transactions involving grain and feed exports that may have violated the bribery act.

Expanding internationally—including in Eastern Europe—has been a priority for the grain trader and processor in recent years. The company has an 80% interest in Alfred C. Toepfer International, a merchandiser and processor of agricultural commodities with offices in Ukraine, Hungary, Romania and elsewhere.

Ukraine is the world's ninth-largest producer of wheat and the fifth-largest exporter, according to the U.S. Department of Agriculture. It also is the world's fifth-largest corn producer.

Through Friday's close, the company's stock was up 58% so far this year.

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